The action plan seeks to promote green and sustainable financial markets, improve ESG disclosures, and establish a classification standard for the financial industry.
Taiwan’s FSC (Financial Supervisory Commission) on Tuesday (18 August) issued the “Green Finance Action Plan 2.0”, as part of efforts to build a sustainable financial ecosystem on par with international standards.
Sustainable development has become a major goal of global economic transformation, which will create new business opportunities for the financial industry, but also bring potential risks, the FSC says.
The new action plan seeks to further promote the effective operation of green and sustainable financial markets, improve ESG information disclosure through annual rolling revisions, and establish definitions and a classification standard for the industry.
The plan will complement the first green finance plan which was introduced and approved by the FSC in 2017.
From the initial focus on environmental aspects of green finance to ESG-oriented finance, the new plan seeks to guide enterprises and investors to include ESG factors in their decision making and incorporate climate considerations in their risk management strategies, thus developing the resilience to respond to climate change.
The plan clarifies three core strategies: effective information disclosure to promote appropriate corporate decision-making; driving the financial industry to respond to the risks of climate change and seize business opportunities; the use of market mechanisms guide the economy towards sustainable development.
The action plan also sets out eight aspects for promoting green and sustainable development: credit for green sectors, responsible investment, capital market financing, talent cultivation, the development of green financial products or services, ESG information disclosure, prudential supervision, and international linkages and incentives.
FSC Chairman Huang Tien-mu pointed to the increasing financial products with sustainability or green labels for the move to launch the new plan. “ESG has become an international universal value, and through the implementation of Project 2.0, we hope to move Taiwan’s capital market forward,” he said.